Walsh Comapny manufacturers and sells one product. The following information pertains to each of the company first two years of operations

Variable cost per units

Manufacturing

Direct materials 29

direct labor 18

Variable manufacturing overhead 6

Variable selling and administrative 5

Fixed manufacturing overhead

Fixed selling and administrative expenses

During its first year of operation walsh Produced 50,000 units and sold 40,000 units. During its second year of operation,it produced 40,000 units and sold 50,000 units. The selling price of the comapny's product is 53 per unit

1. Assume the company uses variable costing:

a. Compute the unit product cost for Year 1 and Year 2.

b. Prepare an income statement for Year 1 and Year 2.

2. Assume the company uses absorption costing:

a. Compute the unit product cost for Year 1 and Year 2.

b. Prepare an income statement for Year 1 and Year 2.

3. Reconcile the difference between variable costing and absorption costing net operating income in Year 1.